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Do you have basic Medicare, or have you enrolled in a Medicare Supplement, Part D Pharmacy, or Medicare Advantage program?
You may be missing an opportunity to save money by enrolling in one or more of the available Medicare programs.
 Did you purchase a Medicare Supplement plan before 2010?
If your plan was purchased prior to that date, it might be a “standardized” plan which has now been replaced by a “modernized” plan. The newer plans have better benefits, and potentially lower prices.
 When was the last time you checked the monthly premiums on your Medicare Supplement plan?
Some carriers have had large rate increases and the difference between lowest and highest premiums can be as much as $100 per month.
￼￼￼￼￼￼￼ Is my Medicare Supplement plan the correct plan, or am I wasting money?
It is possible that you may be paying a lower monthly premium, but spending more money overall for higher out of pocket costs.
 Have I purchased Part D Pharmacy coverage to go along with my Medicare Supplement plan?
Your prescription drug needs may have changed, and a different plan may be less expensive than your current plan.
￼￼￼￼ Has my personal health changed and required more frequent visits to a physician or hospital?
If so, you may want to consider joining a Medicare Advantage plan, or changing to a different Medicare supplement plan.
 If I am on a Medicare Advantage plan, have I been nearing or exceeding my annual Out of Pocket maximum limits?
Growing out of pocket expenses may be a good reason to consider an alternative plan.
 Did I lose access to some of my physicians or hospitals this past year because my Medicare Advantage plan had significant changes?
Changes in relationships between the insurance carrier and its hospitals and physicians
can cause network disruptions which may force you to change your medical providers.
 Is my personal lifestyle changing (travel or ￼￼location of children)? Do I need flexibility in health plan coverage?
If so, a Medicare Supplement may now be a better plan for me than in the past.
 If over 65 and still employed, is employer coverage still the best option for me financially?
If you are spending more than $300/month on employer coverage, deductibles, copays, and coinsurance, you may be better off with Medicare
￼￼￼￼￼￼coverage than with your employer plan.

What’s hot and what’s not. Like most things, building wealth for your retirement is ever changing. That’s not to say the old ways never worked, but today, there are better methods and strategies to expand your wealth.

Take the traditional buy and hold portfolio theory. It’s outdated. Remember 2008? That rollercoaster market is history now, but if you rode it out, you may have lost as much as 40 percent of your portfolio. There’s a better way to handle cash today. Read on.

Mutual funds are but another financial vehicle that, year after year, have been a gross injustice for most investors. When you examine the fact that more than 90 percent of mutual funds have underperformed the stock market as a whole for the past five years, it’s a no-brainer.

In spite of the millions spent on marketing hype by funds companies and brokerages trying to convince you that selling mutual funds is the best way to build wealth, it isn’t necessarily so. There are much better returns-generating vehicles that are more secure, more transparent financial strategies like exchange traded funds (ETFs), and unified managed accounts (UMAs) that put the genie in your corner and more dollars in your pocket.

Let’s look at some more examples:

Old way: Commissions on every transaction by brokers leaving you wondering where your money was going and why?

New way: Fee-based management. Clients pay one flat fee for all services rendered, based on the value of their portfolio to the advisor, rather than a broker. The fee-based system gives the incentive for the advisor to increase the value of your portfolio. The advisor makes money; you make money. Makes sense doesn’t it?

While we’re talking about those fees laid on by the fund companies, the old way was a complete lack of transparency. Anything more than paying for services was all the investment companies wanted the investors to know.

The Internet and the digital revolution peeled away the veneer of secrecy investment companies have inflicted on your investments for decades.

New Way: Today, complete transparency is available to every investor. They have complete access to their portfolio, and are even able to track buys and sells by money managers on a real time basis. Insist on full transparency. It’s another new way for you to discard the old and get onboard with the new wayof doing business.

But nowhere in financial management is the shift from the old to the new more critical than in the area of asset allocation. How critical is it? Asset allocation, market timing, and security selection were tested for the variability of returns in a sample of 90 large U.S. pension plans by Brinson, Hood and Beebower in 1986, with a follow up study in 1991. It was found that over time, asset allocation decisions are more important than the other factors in determining how a portfolio performs.

If that’s true, the mix of stocks, bonds, cash in asset classes, and how your assets are positioned are key in determining if your portfolio is “strategic” or “tactical”.

Strategic asset allocation is an asset management strategy based on portfolio theory. As you know, when a portfolio is set up, a base policy mix is selected based on projected returns and risk tolerance of the client. Then as time goes by, the original mixes are rebalanced yearly or quarterly to maintain the long-term financial goals of the client. This is essentially buy and hold, and has served many investors — including Warren Buffett — well.

However, this tried and true strategy offers promise of more stability while still maintaining a strategic outlook for the individual investor. This is utilizing a tactical approach to move among various asset classes to take advantage of short and intermediate market inefficiencies to increase returns. Our asset of choice is ETFs.

Tactical money managers (TMMs) use a systematic process to evaluate different asset classes on a short timeline basis. They take advantage of favorable investment valuations. This is the way they work. For many reasons, good investments will often become undervalued. This undervaluation may be the result of economic forces, lack of investor confidence, or any number of the other factors. However, when circumstances change and the factors that caused the undervaluation disappear, the investments’ price will rise to more favorable levels. Hence, the investor’s returns will be improved.

Thus, this strategy allows the TMM to create extra value by taking advantage of certain situations in the marketplace. It’s a moderately active strategy since the TMM(s) returns to the portfolio’s original strategic assets then move elsewhere when desired short-term profits are achieved. This is sometimes called an opportunistic approach.

So, just as believers in modern portfolio theory accept that investors should diversify across asset classes, we believe too the investor should also diversify across asset classes. However, the new way is to diversify further. Use a given percentage of your wealth to hire a TMM upon advice of your advisor to take advantage of the rise and fall of a cantankerous market (i.e., 2008 and early 2009, 2010, 2011) to boost returns on a tactical basis. This means tactical money management can work in tandum with strategic allocation to provide diversification on an increased dimension. Thus, the investor can be provided with the opportunity for better returns while reducing risk, if you have both strategies within the same portfolio.

Now, let’s talk about the financial structure you should implement to gain the most returns on their wealth and reach the best comfort level with your risk adverse strategy. Certainly, we don’t advise purchasing buy and hold mutual funds, which historically have dealt investors high capital gains taxes, lackluster return, lack of transparency and high/hidden fees.

The best new strategy to come along lately for the astute investor is the Unified Managed Account (UMA). Just like separate managed account (SMAs), the UMA rewards the client with asset customization, professional money management and, most important, reduced tax liability.

Both SMAs and UMAs are asset management portfolio strategies managed by independent money managers under an asset based fee structure called a platform.

The UMA structure is simpler. It provides comprehensive asset management in a single account. It removes the need for multiple accounts and combines all the assets into one. Best of all, the UMA can also include most other alternative asset management vehicles (i.e. stocks, bonds, and ETAs). Again, the portfolio is arranged purely as one single account — with full transparency under a fee management system. The retiring baby boomers are looking for simplicity.

Thus the UMA approach using separate account managers and ETFs with access to both strategic and tactical models is the way to go for the future. Sure beats the old way!

For most mutual fund investors, the high fees, add on capital gains taxes, and blatant lack of transparency by the fund companies seem to be virtually ignored. Conversely, most investors don’t even realize there are other wealth building strategies out there that are superior to mutual funds.

If you are buying mutual funds today, you are disregarding the tax issue at your peril. In essence, if you are also holding your mutual funds for the long haul — 10 or 20 years — then you will pay a price down the line.

As you know, because of the way mutual funds are bought and sold, it is all too possible to lose money on your investment and also wind up paying significant capital gains taxes. Yet, low returns and capital gains taxes — the double whammy — have been happening every year since 2000, and if the predictions are correct, the excess taxes will continue to punch holes in your portfolio in the future.

Thus, it’s my opinion that reducing your taxes may be the strongest reason you have for making a separate managed account (SMA) a part of your wealth building strategy instead of mutual funds.

Capital gains taxes are but one explanation of why investors cannot get traction when they put their wealth into mutual funds. Many credit high mutual fund fees is another cause investors are flat-footed when it comes to mutual funds.

Here’s the classic “he said, she said” scenario. The Investment Company Institute, the fund industry’s trade organization, touts an overall mutual fund expense as a percent of assets at 1.17 percent.

On the other hand, KaChing, an investing and trading Web site, says mutual funds put the annual cost of actively managed stock funds at 3.37 percent. The site says ICI fails to factor in trading commissions, hidden fees and yes, taxes.

The tax liability is the biggest difference between KaChing’s analysis and the ICI’s position. Both organizations have a vested interest in their comments, according to an article (Feb 12, 2010) in the Wall Street Journal. The ICI represents the mutual fund industry, and KaChing markets investment services that compete with mutual funds.

No matter. To your clients, who are trying to save for retirement and manage their wealth, the cost of investing in funds can be enormous. Even the smallest percentage of expenses and fees can mean thousands of dollars less over decades. And the thought of more capital gains being fused with your portfolio in the future is reason to pause. For instance, while a client’s 2009 tax year is long gone, a great way to decrease your client’s tax liability for 2010 and future years is to get him or her out of mutual funds and into a separately managed account.

You are aware that separate accounts are similar to mutual funds, but go steps further. While mutual funds invest in a number of securities for a pool of investors, an SMA further tailors a portfolio for an individual investor. Consider a separate account is like a personalized mutual fund with an assigned money manager who takes his or her cues from clients and the financial advisor, but also has full discretion to make trades as the wealth manager sees fit. The client in a separate account owns his own securities. This gives the client a level of control not available in a mutual fund.

Switching to a separately managed account will generally help reduce your client’s tax burden. It can add up to a lot of money reflected in their return on investment (ROI) and be as much as 2 percent to 2.5 percent of the total annual return.

With taxable prone mutual funds recording short-term capital gains, investors in the 39.6 percent federal tax bracket have to yield a performance gross of 16.56 percent to net 10 percent. But in a separate account, they would have to gross only 12.5 percent to net the same 10 percent, according to Money Management Institute, the association representing separately managed accounts.

Taxes paid by investors in taxable mutual funds currently make up about 50 percent of the $10 trillion mutual fund market. Although mutual funds have produced some pretty solid returns over the years (don’t forget 2008), investors still seem largely unaware of the substantial gap taxes play in lagging mutual funds’ returns in the markets in which they invest.

One might think that mutual fund investors getting smacked a number of times with capital gains taxes each tax year since 2000 would have them looking for a better way to accumulate wealth.

No, not unless an astute financial advisor is there to guide them in escaping mutual funds and setting up an SMA to build wealth.

Webster’s Dictionary is always searching America’s Lexicon landscape for words or phases that are becoming popular on their way to becoming permanent. “Phased retirement” is a term we have seen with more and more usage in recent years brought on by many factors such as a sour economy, longer life spans and members of the baby boomer generation rewriting the book on retirement.

Phased retirement is a catch all term for retiring by gradually decreasing work time instead of abruptly upon reaching retirement age moving to Florida to be full time on the golf course. Your decision to phase in retirement can be on your own terms or by necessity. That is, more and more retirement age people find themselves in a no choice situation to keep working because simply they can’t afford to retire as soon as they’d hoped.

Others don’t wish to clock from 95 mph to zero in one stop. They want to gradually move into full time retirement by continuing to work part time, do volunteer work or tackle hobbies left on the shelve during their full-time working years. Either way, if you are considering a phased retirement you should be ready for some very different financial challenges that usually do not occur with the traditional retirement process.

Sure, the prime financial benefit of a phased retirement is that you will continue to get a paycheck, which may lessen the need to draw on your retirement savings, allowing your money to grow further.

Conversely, when you reduce work hours and salary, it could have a direct impact on your benefits at your company.

Here are a few considerations:
• Life insurance: May be tied to a multiple of your salary
• Long-term disability insurance: Determine what affect is has if you continue working with this form of insurance
• Company health insurance: Check your company health coverage to see if reducing work hours will affect eligibility
• Social Security: Phased in retirement could reduce benefits if you begin to collect SS before reaching retirement age and continue to work. (Each year before full retirement age is reached, the SS benefit will be reduced by $1 for every $2 you earn over a set limit, which is $14,160 for this year. The year when your client reaches retirement age, it’s $1 for every $3 earned to income limit of $37,680 for this year).
• Pension and other retirement benefits: This is a critical area. You could be vulnerable if your company doesn’t subscribe to letting employees receive pension benefits earlier. NOTE: Federal law allows workers to take pension benefits at age 62.

Typically, pensions are formulated by an employee’s service years and salary during the final days of his/her last days of employment. You can see, by phasing in retirement, the lower salary could reduce earning additional pension benefits. It’s important to check this out with your place of employment.

What about your 401(k)? Will you still be able to participate if working hours are reduced to part-time?

You might have to be creative in long term prospects of you considering both the extra income you would be receiving as a part-time working employee either at the original company or something unrelated and the long term effects on your pension and other savings programs. Using your savings funds to increase your assets value in separate accounts or annuities might be good options as you age.

As more and more companies consider the value of phased retirement, restrictions will undoubtedly loosen up. After all, not only does this reduce the compensation packages of long-term employees but also company sponsored phased retirement programs can be used to retain skilled older employees who would otherwise retire (especially in sectors where there is a shortage of entry-level job applicants). This can reduce labor costs or arrange training of replacement employees by older workers. While currently only 5 percent of midsize and large companies offer a formal phased retirement program, nearly 60 percent expect to develop one in the next five years, according to a recent survey by Hewitt Associates.

A growing consensus exists that the nature of retirement is changing. No longer do most workers wish to experience a sudden end to work, followed by an equally sudden onset of full-time retirement. Instead, many workers wish to ease in to retirement, transitioning out of the workforce with a reduced workload.

My advice is to be alert to this accelerated trend of phased retirement and develop asset strategies to accommodate your needs desiring this retirement lifestyle.

If you’re an pre-retiree or retiree who is invested into mutual funds, no doubt you have given thought to how great it would be to customize your holdings to reflect your individual financial needs.

In fact, as you know, in mutual funds you don’t own any of the stocks in your portfolio. You own shares of stocks. They‘re in an asset pool. It means your mutual funds relinquish control to what and when mutual funds managers buy and sell securities in your portfolio.
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Separately Managed Accounts (SMAs), on the other hand, are portfolios of securities handled by a money manager(s) that your advisor and you select. From there, your assets are usually invested in a diversified group of stocks or bonds similar to mutual funds.

There is a major difference, however, similar to taking the bus (mutual funds) to riding in a limo (separate accounts.). Instead of being one of thousands of investors in a mutual fund, you own the securities in a SMA –and you retain the option of rebalancing your portfolio assisted by your advisor and the pre-chosen professional institutional money manager or managers.

In short, with a SMA, YOU own your own private mutual fund.

A separate managed account allows you to have a say over how the money manager(s) select and trade securities in the portfolio based on your predefined investment strategy. This includes trading moves to reduce capital gains taxes as SMAs can be highly tax efficient.

You with a separate account have the ability to exclude specific holdings from your portfolio. If you already owns lot of tech stocks in other accounts, or if you retired or still work for a tech firm and much of your assets is already riding on company stock options, you with his advisor’s help can set up a filter that prevents the money manager from putting Microsoft or any other high tech stock into your account.

Lynn Mathre, president of Asset Management Advisors in Houston, has found local Compaq Computer Corp executives, have substantial holdings in their company’s stock, which they can’t or don’t wish to sell. To offset that risk, Mathre asks her SMA money managers to avoid buying Compaq securities and to tread lightly in the computer sector, as well. “You can’t do that with a mutual fund,” she says.

In addition, it’s possible you find certain industries offensive—tobacco, alcohol, gambling (the sin stocks), and nuclear power, whatever. If so, you can ask for stocks from those industries be barred from your portfolio.

In short, you have the right, with a SMA to include or exclude securities based on your ethical, economic or political views. This is usually not possible with most mutual funds.

It’s the flexibility of customization available to investors that is significant. If an individual has strong feelings regarding social responsibility, the environment, or faith-based values, he or she can implement those beliefs through their portfolios. On the other hand, such restrictions may not be as important for many. But that doesn’t mean you client not change your mind a year or two later — restrictions can be placed or lifted at any time.
In the past, many separate accounts looked alike as a result of limited investment style offerings, usually only large-cap growth or value were available. Customization is more common today as international, mid-cap and small-cap styles are commonly offered also allowing you to take advantage of greater individualization regarding asset allocation and other investment options (ETFs, mutual funds, hedge funds, etc).

Nevertheless, the customization of the portfolio and the ability for the client to restrict certain types of securities is often underutilized. There are no hard numbers on this but probably somewhere around 25 percent of SMA clients use this capability. Other industry sources have reported more than 25 percent.
Chris Davis, the executive director of the Money Management Institute, the association representing the separately managed accounts industry, expects use of the customization benefit to increase. “It’s a feature that will grow in use as a portfolio grows in size and the client’s needs also grow,” Davis said.
Davis compared the customization element with a four-wheel-drive SUV. “You don’t use the off-road feature all the time,” he said. “But when you do get off the road, you’re sure glad you have it.”
Knowing you have the option of customization in a SMA portfolio is an important benefit, as you no longer have your hands tied when it comes to making investment decisions within your specific account holdings. The separate account puts the individual and his/her advisor in control. You ride in a private limbo rather than with the crowd on the bus.

Mutual Funds vs. Separate AccountsMutual Funds:

• Your client does not own his stocks
• Your client does not own his stocks
• Your client’s assets is pooled with other investors
• Your client or you have no say in a specific fund’s holdings

Separate Accounts

• Your client owns his stocks
• Your client can buy and sell securities in his/her portfolio
• Your clients has the option to include or excluded stocks in portfolio

Are baby boomers getting more attention than they deserve? Before I answer the question, here are some facts on the biggest population bubble in our nation’s history:
1. An estimated 78.2 million baby boomers were born between 1946 and 1964

2. Almost 8,000 people turn 60 each day

3. Fifty-nine million boomers will be living in 2030. During that decade year, boomers will be between ages 66 and 84 — 54.9 percent will be female.

If you put the facts together, it means a big bunch of people will be receiving discounts on a Denny’s Grand Slam breakfast and will be around to eat it for a long time into the foreseeable future.

The long awaited milestone of this important demographic group is now upon us, is not going away, and, in spite of all the hype surrounding the boomers, they will have significant implications on our economy and investment markets for the next 20 years — and beyond.

So the answer to the question, in my opinion, is: The more boomer attention received the better. Bring on the hype if it helps rivet the attention of our law makers. This baby boomer phenomenon is going to have important consequences for retirement if you are either younger, older or in the middle of the pack. Remember this fact: 43 million of American’s 100 million households will enter retirement within the next 20 years.

As you know, Americans who are retired with portfolios supporting them have different needs than younger pre-retirees who are working and saving for their future.

Portfolios after cash withdrawals begin makes these portfolios far more vulnerable to short-term economic and market swings than an individual whose portfolio has had 20 years to build assets. This is exactly the situation we are going through now.

Let’s face it: Most of us have been overly focused on asset accumulation and portfolio performance. We unprepared to handle the huge distribution of assets coming sooner than realized.

This new trend of switching from accumulating assets to helping retirees stabilize those assets into income to last the rest of their lives has not been on everyone’s short-list.

There’s a whole group of issues on the stage: longevity, inflation, taxes, monthly income plans, philanthropic efforts and second job entry, health care and long term care costs, estate planning, inheritance, life long learning, Social Security benefits, care giving for parents and children, liquidity, investment guarantees, retirement security and the seesaw of market performance.

Let’s just take just one issue, “retirement security.” Compared to 2007, baby boomers confidence in their long-term retirement resources has fallen in the dunk tank. In 2007, Watson Wyatt Worldwide, a global consulting firm focused on human capital and financial management, surveyed boomers about their retirement plans, and found that 63 percent felt very confident about having enough resources to live comfortably five years into retirement.

The latest survey by the consulting company shows that confidence has dropped to 44 percent. Further, the survey shows that, throughout a 25 year period, 32 percent of boomers have no confidence at all about their retirement security — most of whom will live that long, according to life expectancy tables.

A more recent survey conducted by the Employee Benefit Research Institute (EBRI) has posted a new low in confidence about having a financially secure retirement. Only 20 percent now say they are very confident about having enough to live on comfortably in their retirement years, down from 41 percent in 2007 (the lowest since the survey began in l993).

I need not mention the lost confidence, market instability and Wall Street scandals (i.e., Madoff) that have influenced the role of the financial advisors like myself and how recent events have affected the confidence, trust, and reliability of our advice. Due to these recent events, investors are disenchanted with advisors because, I suspect, many advisors have been more interested in gathering assets than managing them.

As we are talking about the baby boomer generation here, the challenge for wealth advisors is simply this: You will have to work with your boomer clients to have an asset allocation strategy that fine tunes withdrawals in order to maintain sufficient income throughout their lives.

This calls for Human Relations 101. More than ever, boomer clients who still are working and have a longer investment horizon. To be specific: Why not offer a complimentary service to clients/prospects entitled, “Are you making enough for life?” As a result of the drop of this year — and the mini recovery of 2009 — will you run out of money in the future?

Since there’s a good chance the boomers will make it to the IRS life expectancy tables, withdrawals may be too high compared to post-2008 retirement balances. Any advisor can be a hero if he/she catches this now — before it’s too late to reassess clients and prospects. Extend this service to your newsletter and seminars.

Focus on income solutions for your boomer clients rather than specific investment products. With this approach, you as an independent advisor, can develop realistic income strategies that can move boomer clients successfully through their retirement years.

What a year so far! You’re fighting to steer clear of the potholes of this down economy, the equities elevator (ups and downs), home foreclosures, job layoffs and a stimulus for everybody, it seems, but you.

Not only that, if you haven’t done so already you may be fighting to protect your biggest check you will probably ever receive: your final lump sum retirement pension.

You have worked long and hard to build wealth in your retirement savings and you want to be double sure that you preserve those assetswhen you change jobs or retire. At this stage of your life, you should not have to lose a large portion of your wealth to excessive taxation either.

The message is that Uncle Sam is not your friend. The Uncle is prepared to do taxable damage to your pension plan unless you follow concrete steps. You need to turn Uncle Sam from a pension-grabbing tax collector into a benefactor of high proportions. Preserving yoour wealth will be the best deal you will ever receive from the Uncle.

As you know, the IRS at the time of withdrawal and other weak moments, is poised to grab 70 percent, 80 percent, or maybe as much of 90 percent of your retirement funds!

There’s a better way of managing retirement money than the traditional IRA. It does not mean the traditional IRA is chopped liver. In fact, you should know that it’s the one of the best tax-saving and wealth-building vehicles for savers our government has ever put together to help individuals fund their retirement.

However, the Roth IRA instituted in l998 by Congress and introduced by a fellow named Roth (U.S. Senator William V. Roth Jr. of Delaware) is tweaked slightly differently than the traditional IRA. It may be best for you that the Roth IRA is a better way to go with your wealth, in most cases.

As you know, a Roth IRA is an individual retirement plan that bears many similarities to the traditional IRA. The big difference in a Roth is that the contributions are never tax deductible, and qualified distributions are tax-free. In short, a Roth is a tax-free account; no taxes are paid on your earnings, the interest, and dividends — ever. With a Roth, your client pays his or her taxes up front as the money goes in, not at the other end as they take it out. Of course, there’s no free lunch, as certain requirements have to be met for you to qualify for a Roth.

Still, in effect, in 2009, you could deposit $5,000 in a Roth and a $1,000 “catch up” contribution for individuals age 50 or over. Contribution caps have been increasing since 2002. 2010 is the beginning of inflation indexing, so your maximum contribution will increase in $500 increments yearly in the foreseeable future.

Also, as you are probably aware, for tax years after 2009, all taxpayers can make Roth IRA conversions regardless of income level.. Once your adjusted gross income reaches $105,000 if you are single, or $155,000 if married, the amount you can contribute decreases, reaching zero for those with an AGI of $120,000 (single) or $176,000 (married). To let you know, the “phase out” range is how much your IRA deduction decreases as you approach maximum AGI.

You will love this. Another benefit of the Roth IRA is that there are no required minimum distributions imposed on the owner. The owner does not have to take money out of the IRA unless he needs it. His or her Roth can compound undisturbed and be left to the next generation, if desired. Beneficiaries, however, are required to take minimum distributions based on their life expectancies.

Most political observers expect taxes to increase, and the President and the majority in Congress have advocated higher taxes on at least some taxpayers. Therefore, if you averaged your tax payments over the two-year period in 2011 and 2012, you might be hit with higher tax rates.

Look upon a Roth as a savings account. You can pull out contributions anytime you wish. That’s a huge difference from the traditional IRA and 401(k) counterparts. Some things to keep in mind, however: It applies to the money you put in, not earning or interest. For those withdraws, you have to be subject to IRS Qualified Distribution Rule. Also, watch losses. Putting $5,000 in and losing a portion of its value will prevent you from pulling out the whole, $5,000 later.

It’s a win-win situation. If your client converts to a Roth and then decides he or she wants to go back to a traditional IRA, you can do what’s called an IRA recharacterization. Also, unless certain criteria are met, Roth IRA owners must be 59 ½ or older and have held the IRS for five years before tax-free withdrawals are permitted. On these types of things, your advisor can steer you in the right direction to avoid potholes on the Roth conversion.

A Roth is a really good deal for the Gen X and Gen Y group. It gives them years and years to accumulate tax- free earnings. Actually, anyone under 50 should get into a Roth as their primary retirement vehicle. For boomer-plus people, and probably the majority , a Roth will be good for them too, based on their planning needs. Remember, most aging clients have long-lasting genes. With the longevity bonus, most boomers will receive — they will have maybe 20 years more of living give or take to build upon their nest egg. And don’t forget about those grandchildren your client could leave his or her legacy to.

When all the facts are in, putting your wealth into a Roth IRA is one of the best deals you can get, because it’s the best investment vehicle Uncle Sam has ever brought to the table.